Europe’s Monetary (Dis)Union
Europe's Progress Toward Economic Integration
New Opportunities and New Challenges
Euro Fantasies: Common Currency as Panacea
The Case for EMU: More than Money
EMU and International Conflict
The Dollar and the Euro
The Degeneration of EMU
The Future of the Euro
Why the Greek Crisis Will Not Ruin Europe’s Monetary Union
The Failure of the Euro
The Little Currency That Couldn’t
The Crisis of Europe
How the Union Came Together and Why It’s Falling Apart
Can Europe’s Divided House Stand?
Separating Fiscal and Monetary Union
Saving the Euro Will Mean Worse Trouble for Europe
Charting the Disastrous Choices Ahead
Can the Eurozone Be Saved?
Yes, but the EU Summit Was Too Little, Too Late
How to Save the Euro -- and the EU
Reading Keynes in Brussels
Why Only Germany Can Fix the Euro
Reading Kindleberger in Berlin
The Myth of German Hegemony
Why Berlin Can't Save Europe Alone
Europe's Optional Catastrophe
The Fate of the Monetary Union Lies in Germany’s Hands
Why the Euro Will Survive
Completing the Continent’s Half-Built House
Avoiding the Next Eurozone Crisis
How to Build an EU that Works
Europe After the Crisis
How to Sustain a Common Currency
Europe's New Normal
It's Here, It's Unclear, Get Used to It
So Long, Austerity?
Syriza's Victory and the Future of the Eurozone
Austerity vs. Democracy in Greece
Europe Crosses the Rubicon
Why Greece Will Cave—and How
Alexis Tsipras and the Debt Negotiations
Why Greece and Europe Will Still Stay Attached
How to Contain Athens' Economic Problems
A Pain in the Athens
Why Greece Isn't to Blame for the Crisis
The Agreekment That Could Break Europe
Euroskeptics, Eurocritics, and Life After the Bailout
The EU has tried repeatedly, and failed repeatedly, to calm the markets. That is not for a lack of solutions at hand. Consider three: make the European Central Bank (ECB) a lender of last resort, spread exposure by pooling eurozone debt via eurobonds, or massively increase the European Financial Stability Facility (EFSF) and start bailing out weak economies in earnest.
Any of those solutions would reinstate confidence and lead to stability, but each is easier said than done. The first and arguably best solution -- in which the ECB simply buys debt without limits from Italy or any other member state in trouble -- is legally questionable under the EU treaty; what's more, Berlin rejects the idea, citing the bank's limited mandate, and says it could spark inflation. The creation of eurobonds is a political nonstarter for northern European states distrustful of their profligate, crisis-prone counterparts in the south. And eurozone leaders have already tried -- unsuccessfully -- to create a bigger EFSF on the cheap by asking the BRIC countries to buy in.
Simply put, markets are reeling because eurozone countries have failed to go beyond half-measures to resolve the crisis. The longer they delay taking any one of the three possible solutions, the closer the markets push them to the brink of disaster. But here's the rub: if the eurozone survives, the consequences may be just as ruinous. Austerity will be a drag on growth in the center and the north of Europe, and on competitiveness in the south. Add to this increasing unemployment, inequality, and poverty, and the continent has prepared a recipe for rising social unrest and polarization on the political extremes. Not until European leaders realize the fundamental flaw in their current approach -- a lack of real political and economic integration -- will there be an end to the crisis in sight.
First, consider the euro going bust. Europe would undergo a vast and painful transformation. How exactly it would happen remains uncertain, but there
Loading, please wait...